Labcorp 2025 Q3 Earnings Strong Performance as Net Income Surges 54.2%

Labcorp (LH) reported fiscal 2025 Q3 earnings on October 29, 2025, with results exceeding expectations in key metrics. The company’s revenue and earnings growth outperformed prior guidance, though recent stock price performance has been mixed.

Revenue

Labcorp’s total revenue rose 8.6% year-over-year to $3.56 billion, driven by robust performance in its core segments. The Diagnostics Laboratories division accounted for $2.77 billion, reflecting strong demand for diagnostic testing services. Meanwhile, the Biopharma Laboratory Services segment contributed $799.10 million, underscoring growth in clinical trial and drug development support.

Earnings/Net Income

The company’s earnings per share (EPS) surged 55.4% to $3.14 in Q3 2025, compared to $2.02 in the prior-year period. Net income also expanded significantly, reaching $261.50 million—a 54.2% increase from $169.60 million in 2024 Q3. This marks Labcorp’s fifth consecutive quarter of year-over-year earnings growth.

Post-Earnings Price Action Review

Despite the strong earnings, Labcorp’s stock faced downward pressure in the immediate aftermath. The share price declined 1.97% on the latest trading day, extended its weekly loss to 8.60%, and fell 7.46% month-to-date. This underperformance contrasts with the company’s solid financial results, raising questions about market sentiment and potential overcorrection.

CEO Commentary

CEO Adam Schechter emphasized strategic initiatives to drive long-term growth, including divestitures, site consolidations, and targeted acquisitions in oncology and clinical testing. He highlighted the launch of AI-driven tools, such as a collaboration with Amazon Web Services, to enhance operational efficiency and customer experience. Schechter also noted the importance of maintaining profitability amid margin pressures and regulatory challenges.

Guidance

Labcorp revised its full-year revenue growth outlook to a midpoint of 7.4%-8.0%, citing currency fluctuations and timing of acquisitions. Adjusted EPS guidance was raised to a range of $16.15-$16.50, reflecting confidence in margin expansion and cost discipline. Free cash flow guidance also increased to $1.17-$1.29 billion.

Additional News

Recent non-earnings-related developments include insider selling activity, with Leeward Investments LLC reducing its stake by 9.2%. The company also announced a quarterly dividend of $0.72 per share, maintaining an annualized yield of 1.0%. Analyst upgrades from UBS and Mizuho raised price targets to $325 and $320, respectively, citing long-term growth potential in diagnostics and biopharma services.

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